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April 05, 2019 | credit-union-advocacy

How Credit Unions Help You and Your Community

What is a Credit Union?

On the surface, credit unions are financial institutions that offer the same products and services as banks.

On a deeper level, credit unions are member-owned financial cooperatives whose operating philosophy is “not for profit, but for service.” Credit unions exist solely to serve their members and their local communities, and they do so by returning their profits to their members and reinvesting in their communities.

Credit Unions Return Profits to Their Members

Banks are owned by shareholders who are people and companies that own stock in the bank. When banks profit, they return their profits to their shareholders.

Credit unions are owned by their members who are people in your local community that have accounts and loans with the credit union. When credit unions profit, they return their profits to their members in the form of higher savings dividends, lower loan rates, and other perks like ATM Fee reimbursements.

Because credit unions are owned by their members, every business decision they make is with their members’ best interest in mind.

Credit Unions Reinvest in Their Communities

The money you deposit at a bank will likely leave the community in the form of profits for shareholders, executive bonuses, and even paying the bank’s legal fees. Last year, the banks profited over $45 billion collectively.

When you deposit money at a credit union, your money stays in the local community and can used to help a family get their first mortgage, finance a student’s education, or help a local business owner open a new store location.

Because credit unions are not for profit, they thrive by reinvesting in their local communities.

Credit Unions Cooperate with Each Other

One of the National Cooperative Business Association’s Seven Cooperative Principles is “Cooperation Among Cooperatives.” As financial cooperatives, credit unions cooperate with each other in a way that for-profit banks cannot.

The biggest example of this cooperative principle is the national network of credit union service centers called the Co-Op Shared Branch Network, which allows credit unions members to visit designated Shared Branch locations to perform basic banking transactions.